MINIMISING RISK – WHO OWNS WHAT?

The old work van had been used in the business for years, as had the office manager, who’d recently retired after a 9-year stint running the place for you. The handover to her replacement looked ok from where you stood.

The new manager proved competent and, after 3 months appeared to have things under control, and you could go back to high level management only. And golf. (And so you should. It’s only taken 20 + years to get all the usual debt under control).

Your apprentice was in his final year at TAFE, and had become a valuable team member. Lately however, you had to speak to him a couple of times about running late. No big deal.

Last Thursday afternoon at golf you get a call from the police. Your apprentice ran a stop signal, colliding with a new 4wd ute towing a power boat. The police confirm no-one was injured, and your wave of panic subsides. You arrange to have the written off van collected from the police station.

Later that day your phone rings again, this time from the other driver. Evidently his ute was a wreck and the boat also a write off. He was unhappy. You apologize, and confirm you’ll get your insurer’s details across to him in the morning.

On Friday morning you ask the office manager to pull up the van’s insurance details. 30 minutes later she walks into your room holding registration papers but has no knowledge of renewing any insurance policy during her time. You call your former manager who ‘can’t recall, sorry’.

The following Monday you receive an email from the ute owner’s insurer confirming both ute ($90,000) and powerboat ($60,000) are written off, and that they’ll be in touch. Panic returns.

On Tuesday morning your lawyer tells you you’re in the firing line, despite your 19-year-old employee being the driver. You explain your business is owned by the family company, which also owns the work premises, unencumbered. Your lawyer tells you the best course is to settle ASAP to avoid more cost.

On Wednesday you meet your bank, and a real estate agent to sell your business premises. You cancel the next 3 months’ orders.

The lesson

With a little forward planning, exposure to risks like these can be greatly reduced. Talk to one of our business lawyers so you’re at least informed of what you might be risking every day, so you can decide if it’s worthwhile taking any steps to minimise your exposure to risk.